House prices in Adelaide increased the fastest of all capital cities in the month of September. All other capitals saw prices increase with the exception of Hobart which recorded a consecutive monthly decline. Overall, national prices increased 0.8% reflecting continued strength and no sign of mortgage stress or other problems caused by high interest rates.
Across the quarter from July to September, Adelaide recorded the highest capital gain at 4.3%, followed by Brisbane at 3.9% and Perth at 3.6%. At the other end of the growth spectrum is Hobart where values were down 0.2% over the quarter. The growth of prices in all cities is reflecting the current supply dynamics: there is a large shortage of properties in Adelaide, Brisbane and Perth, while Hobart is seeing 40% more properties on the market than at the same time last year.
Nationally, home values are only 1.3% below their all time high which was recorded at the start of the latest RBA rate hike cycle in April of last year. If current momentum is maintained, the national housing market will reach and surpass its record high in November of this year - well before most forecasters have expected. Any further positive news on the inflation and interest rate front will see a significant upswing in prices as FOMO takes place and buyers rush in before interest rates are cut.
This calendar year, prices in Adelaide are up around 6% and on track to end the year within the forecast range that we published back in our May blog post. Next year we expect prices to rise further - between 10-14% - as the RBA begins cutting rates and buyers flock back into the market.
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